Volkswagen South Africa (VWSA) is exploring its options of multi-franchise facilities with other brands.
The brand confirmed this to Dealerfloor, saying that there will be specific requirements for such requests that include clear brand separation and only limited to rural dealers.
While VWSA has confirmed the speculation, a spokesperson for VWSA says that there is no set date for implementation yet.
VW, like Toyota, has been fastidious in insisting on standalone showrooms with strict brand rules. But as the market has stagnated and more contenders from Asia have entered the market, it appears that VWSA will allow multi-franchise showrooms to support dealer viability.
Multi-franchise dealerships have grown in popularity among dealers of brands such as Nissan and Ford. Both these brands have lost much of their volume line-up, leaving dealers to scramble for affordable alternatives such as Mahindra, Suzuki (now the best-selling brand after Toyota), Chery, Omoda and Jaecoo and more recently MG and Jetour.
Volkswagen remains a very important part of the South African automotive landscape. Based in Kariega, the company built its first Beetle on local soil in 1951. It remains a core supplier of the current-generation Polo to left- and right-hand drive markets across the world and it also builds the Polo Vivo for the local market.
The company recently announced that it will build a third model on the same line as the Polo and Polo Vivo, starting in 2027. This third model – expected to be the VW Tera from Brazil – will give dealers a strong foothold in the ever-growing SUV market.
In a recent presentation Martina Briene (Chairperson and Managing Director: Volkswagen Group Africa) said she didn’t want protection because I’m not a protectionist advocate, “but we need to incentivise local business, local manufacturing and local trading”.
Speaking at a National Automobile Dealers’ Association (NADA) Connect 25 event recently, she mentioned a series of challenges faced local manufacturers.
She said huge investments in infrastructure and costs aspects relating to a constant supply of power, the situation at the ports, transport and logistics all affect the eventual cost of the vehicle compared to cheaper imports from elsewhere.
Motus, the JSE-listed integrated automotive business, says the trading environment, including the automotive sector, is expected to remain challenging owing to ongoing economic pressures in its geographies.
Staff costs are the largest overhead in many dealerships. Whilst simply comparing the costs over different periods will give you a broad idea of where the costs are, it will not give you much information on the efficiency of your non-GP generating staff.
In the heart of the broader Johannesburg is a family business that’s been flourishing for 42 years now. The Eagle Corner Group started out as a Ford dealership and Eagle Ford became a household name.
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Staff costs are the largest overhead in many dealerships. Whilst simply comparing the costs over different periods will give you a broad idea of where the costs are, it will not give you much information on the efficiency of your non-GP generating staff.
In the heart of the broader Johannesburg is a family business that’s been flourishing for 42 years now. The Eagle Corner Group started out as a Ford dealership and Eagle Ford became a household name.
GWM South Africa hosted its Dealer Conference and Awards, an annual event that not only celebrated the company’s top-performing dealerships but also heralded the arrival of three new vehicles.
